Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 97, no. 2511: Articles]: April 29, 1916

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REAL ESTATE AND NEW YORK, APRIL 29, 1916 HOW NEW YORK CITY FARED AT THE HANDS OF THE 1916 LEGISLATURE City Blames State for Existing Evils, Pro¬ grams are Formulated, but Debts Increase By HON. WILLIAM M. BENNETT ly/f ANY ycars ago a Governor, elect- •^'■'- ed from tip the State complained in one of his messages that the up-State counties were being taxed to build the Erie Canal for the upbuilding of the City of New York. Of recent years the City of New York has been complain¬ ing that having 70 per cent, of the as¬ sessed valuation of the property in the State, the city was being exploited and over-ta.xed for the benefit of the up-State counties. This feeling seems to have reached a climax during the last few inonths, and the session of the Legis¬ lature just closed was marked by an acrimonious dispute on this question. City Blames the State. The administration of tliis city, goad¬ ed by the desperate financial situation of the municipality started on a cam¬ paign last year to charge all of the financial misery of the city to the Legis¬ lature. Certain members of the Legis¬ lature lent themselves to this scheme this spring to the extent of calling a "rump" session of the Legislature at the City Hall. The result was that, goaded on by the city administration and by these members of the Legisla¬ ture, the feeling between the city and fhe up-State became accentuated to a greater extent than ever before. The result of this crimination and re¬ crimination, however, was that the Mayor's conference split up into three groups and three programs were evolv¬ ed. First came the program of the Tax Reduction Committee, which was limit¬ ed to a few concrete suggestions for the relief of the city by having the State pay to the city certain items of State revenues and taking over from the city certain items of expense borne by the city, but which should properly be borne by the State. - The Mayor's Program. The Mayor, however, was not con- lent with this program, but apparently thought the opportunity ripe to obtain the passage of certain bills, and thus arose the second program or the Mayor's program. For example, the Mayor had introduced at Albany a bill to put the Departments of Charities and Correc¬ tions and Bellevue and Allied Hospitals under the Board of Health. Many have thought, for a long time, that these three departments ought to be consoli¬ dated under a business man as manager, but the idea of putting the other two departments under the Board of Health aroused such a storm of protest that this bill was withdrawn. Instead of advocating the consolida¬ tion of the Department of Bridges with the Department of Docks and Ferries, the Mayor sent up a bill to continue the Department of Bridges, under the title of the "Department of Plant and "Structure," and to put under its jurisdic¬ tion the construction, alteration, main¬ tenance, upkeep and repair of all the buildings now managed by the five .Borough Presidents, the Police Depart¬ ment, Fire Department, Health Depart¬ ment, Department of Street Cleaning, Department of Charities and Correc¬ tions, Bellevue and .Allied Hospitals, and HO.N. WILLIAM M. BENNETT. also the upkeep and repair of all vehicles, boats and other apparatus. So far as could be ascertained, this bill was not favored by the Board of Estimate, and in the opinion of many people would result in confusion and in the building up of a political machine on account of the patronage thus placed in one de¬ partment. This bill was not on the program of the Tax Reduction Com¬ mittee. Still Another Program. In addition to these and other bills in the Mayor's program there was still a third program, namely, the Brown Committee program, which included the enactment of the "pay-as-you-go" policy into a hard and fast law, the result of which will be to make the new Court¬ house, all new bridges, hospitals, school houses, T^arks and all other permanent improvements, except docks, subways and waterworks, payable out of the an¬ nual tax levy. This bill is probably a good bill, but will result either in the shutting down on improvements for some years to come or else in a tre¬ mendous jump in the tax rate. Another bill advocated by the Brown Commit¬ tee, but opposed by the Tax Reduction Committee, was the bill to advance the date of payment of taxes one month a year for four years. The Tax Depart¬ ment of the city pointed out that this would not result in a gain, but in a loss of several million dollars to the city, but it passed the Legislature. .As a result of the Mitchel program and the Brown Committee program, both of which had many bills not con¬ tained in the program of the Tax Re¬ duction Committee, the program of the Tax Reduction Cominittee was lost sight of and many of their bills did not pass, or else were made to take effect next year instead of immediately. One of their bills which did pass provides that half of the motor vehicle tax should be returned to the localities. As New York Citv pays only 45 per cent, of the motor vehicle tax, this will result in about $400,000 being paid back to New York City and about $600,000 being paid liack to the up-State localities. There will have to be a direct tax next year to replace this $1,000,000 thus taken out of the State Treasury. Of this direct tax. New York City will pay 70 per cent. In other words. New York City will receive from the State by this bill $400,000 and pay back to the State $700,000, thus making the citv a loser by about $300,000 as a result o"f this bill urged by the Tax Reduction Commit¬ tee. One thing, however, stands out promi¬ nently, namely, that the Legislature has appropriated for the coming fiscal year at least $15,000,000 in excess of the esti¬ mated revenues of the State for the same period. The treasury starts with a surplus of $10,000,000, as a result of last year's direct tax, but that is capital and not revenue. As a result of these appropriations in excess of revenues, there will undoubtedly be a deficit at the end of the coming fiscal year, and another direct ta.x will have to be im¬ posed, which, of course, will not be very pleasant for New York City. A direct ta.x, however, is the rule and not the exception. In 1906, Governor Higgins called attention to the fact that for the first time in 65 years the State would have no direct tax. In my opinion, it would have been better policy, economically and politically also, for the Legislature to have provided for part of this deficit this year by a direct tax. By leaviiig the entire direct tax to be imposed next year, the Legislature has injected into the Mayoralty campaign of 1917 an issue which will be given greater prominence than it is entitled to. State Debt Increases. .\nother thing that developed at the session was that the State is rapidly getting into the same financial condition as the City of New York. On January 1, 1895. the State was absolutely free from debt. It now has a debt of $200,- 000,000. In 1894 the total appropria¬ tions for all purposes were only $15,000,- 000. Last year the total appropriations, including reappropriations, amounted to $85,000,000, and this year they will amount to between $70,000,000 and $80,000,000. By 1920 the State will have spent more than $100,000,000 for high¬ ways, and will then not have a complete highway system. The State has issued fifty-year_ bonds to build highways and yet certain por¬ tions of the construction work will have to be replaced ten times before the bonds mature. The result is that by 1920 the maintenance of the State high¬ ways will cost the State $8,000,000 a year annually. It is a grave question as to whether the State should not abandon its present systeni of highway construction and maintenance and re¬ turn to the old method. .\ book might be written on this sub¬ ject, but enough has been said to show • that it behooves both the State and the city to stop all extravagances for a number of years and give the taxpay¬ er a chance to catch VV- _ ...